California Insurance Policy

Nothing in California is small. The size of the state, the hundreds-of-foot-tall redwood trees, the sheer variety of topography, the length of coastline, size of the desert and the price tag to live there are all larger than life.

When it comes time to purchase your insurance, one thing is for sure, your policy needs to measure up without costing too much money. Use our FREE comparison tool at the top of this page to begin your search for insurance.

Keeping Them Honest

When buying insurance products, it is tempting to focus entirely on the insurance companies and what they want from you. You may be unwittingly thrusting your life, home, family and vehicles into the hands of unscrupulous insurance agents. The point is that there is a lot more to buying insurance beyond comparing quotes.

Fortunately for you the State of California keeps records on insurance companies and individual agents. Under the news headlines on the California Department of Insurance website, they list actual stories of agents who steal consumer identities, pocket the insurance premiums and other harmful actions.

Though, going through the headlines and action the CDI takes against insurance companies comes fourth on your insurance buying to-do list. Roughly, the process goes in the following order.

1. Decide what coverage you need.
2. Determine the most you can afford to pay in deductibles.
3. Get quotes.
4. Before you compare quotes, eliminate unfit or unworthy insurance carriers.
5. Compare quotes.
6. Find ways to save more money.
7. Apply for coverage and choose among the best carriers who offer you policies.

How much homeowners insurance should you buy?

The same site has links to the various types of insurance you may want to buy, from homeowners and renters insurance to automobile coverage. For homeowners in California, earthquake and flood insurance are two hot topics that require your attention.

Flood insurance is only offered up by the Federal government and requires that you live in a federally defined flood plain.

Otherwise, you cannot buy that coverage. Instead, you need to insure against total destruction of your house. If you had to rebuild and replace all of your possessions, how much would that cost.

For the structure itself, get a quote from a construction contractor who specializes in home building and a home appraiser. They will tell you how much it costs to rebuild your house in today's value.

Otherwise, ignore the cost of your mortgage and even the housing market. Your personal property within your home is another matter all together. Make an inventory, include serial numbers, receipts and make copies that you keep off site and in another region.

Keep one with you at all times so that you can make a claim quickly if your home is destroyed. In addition, always purchase replacement insurance, not actual value. If your glass coffee table is decimated into little pieces, it's actual value is maybe zero. Replacement value would provide the money to go out and buy another one at today's value.

What about earthquake insurance?

If you are new to the state you would assume everyone buys earthquake insurance. That might have been the case prior to the 1994 Northridge quake. Following the more than 11 billion dollars in insurance claims, the insurance industry changed how it offered coverage. For more about this, see the LA Times.

The state had to step in to create a special insurance pool that required a ridiculously high deductible equal to 15 percent of the insurance payout. You would have bought earthquake coverage equal to your whole house and how much it costs to rebuild.

Then, if you had to file a claim, you would have paid 15 percent of that amount before the insurance would kick into effect.

Instead, people forgo earthquake insurance. Though, that's a huge risk, considering you would probably have to walk away from your home or pay to rebuild it on top of a mortgage.

Thanks to changes from the CEA, the state's insurance pool, earthquake coverage carries much lower deductibles and covers more of the household contents.

How much vehicle insurance should you buy?

For car insurance, there are statewide coverage limits you need to meet. They are listed at the California Department of Motor Vehicle's website.

In California, the minimum legal liability insurance on vehicle coverage policies is:

1. 15,000 dollars for the injury and, or death of one individual.
2. 30,000 dollars for injury and, or death of more than one individual.
3. 5,000 dollars damage for property damage.

Liability insurance is how much your policy pays out if you cause an accident involving injuries and death of other drivers and their passengers. As you might imagine, 15,000 dollars would barely pay for a day in the hospital, forget the added medical costs.

California differs from other states in that it allows you to demonstrate the ability to come up with 35,000 dollars, rather than just buying the liability policy. If you are wondering where that number derives, it is the value of a couple injuries or death and the minimum property damage value.

The ways that you can prove you have the money include:

1. A cash deposit of 35,000 dollars with the California Department of Motor Vehicles.
2. Motor vehicle liability insurance.
3. DMV self-insurance certificate.
4. 35,000 dollar surety bond from a California-licensed business.

For California drivers who do not have much money, the state offers low-cost vehicle coverage. It is worth looking into traditional insurance carriers to compare costs on liability in any case. The reason is you might snag a better deal with an insurance company.

Comprehensive and collision coverage are entirely different protection that actually pays out claims for damages that occur to your automobiles. Collision only protects against damage such as if you drive into a fence and need a new fender.

Comprehensive is often confused as meaning full coverage against everything. That's not the case. Comprehensive is only for the vehicle and basically pays out if your car is broken into and items are stolen from it. For instance, you would receive money to repair the damaged car and to replace your belongings.

The way to keep coverage affordable is to raise deductibles to comfortable levels. You are required to pay deductibles for every claim you file and need to take into account whether you could afford to pay up the comprehensive deductible and a bodily injury deductible multiple times in one policy period.

Get Quotes and Eliminate Unworthy Insurers

Now that you know what kind of insurance to buy, the deductibles you can afford to pay and how much insurance you want, you can get a quote. When you receive quotes, it is time to knock some insurers off the list.

Here's how.

1. Are they A++ tops creditworthy? Check A.M. Best to find out.
2. Double check for consumer insurance complaints against individual insurance agents, brokers and insurance companies. The Department of Insurance provides thorough information on who is trustworthy and who to avoid.
3. Be sure the insurers are known for owning up to the responsibility to pay out a claim and to do so efficiently.

Comparing Quotes

Before beginning your comparison, you need to make sure that the various insurance carriers are giving you like information. For instance, one may insist on giving you a quote with an insanely high deductible, while another insurer lists an enormous premium with a low deductible.

Decide based on what you want. You might just take the quotes at face value and decide simply among the options they present. Though, what makes more sense is to contact some of the insurers directly or try re-running the quote comparison by inputting different values.

Now, take advantage of shopping for vehicle insurance and homeowners insurance at the same time. Buying multiple policies simultaneously with the same carrier usually gives you a multi-line discount. That means more money stays in your pocket.

Saving More on Policies

When you are buying insurance it's tempting to forgo it and choose no coverage. If you were not forced to buy insurance, would you do it? The answer, is maybe, but would it be wise?

Increase deductibles to comfortable enough levels. On homeowners insurance, it would be a freak accident or act of nature that forces you to file a claim. The likelihood of ever having one is barely present. Go ahead and increase those. Auto insurance is another story.

You might need it more than one time in one year, so be sure you can afford to pay it. Get discounts for safe driving and lengthy periods of no insurance claims.

Insurance is not an investment, yet the payoff is a lifesaver following personal tragedies and catastrophes. It is impossible to be prepared for the unexpected.

Having insurance gives you something in the wake of an accident or an act of mother nature. In California, vehicle insurance and homeowners or renters coverage may be a lifesaver for you one day.

Be sure to use the FREE tool below to start comparing rates today!